Reference no: EM132868655

1.   Inventory

If your business requires inventory, explain:

• What kind of inventory will you keep on hand (raw materials, supplies, finished products)?
• What will be the average value of inventory (in other words, how much are you investing in inventory)?
• What rate of inventory turnover do you expect? How does this compare to industry averages?
• Will you need more inventory than normal during certain seasons? (For instance, a retailer might need additional inventory for the holiday shopping season.)
• What is your lead time for ordering inventory?

2.   Suppliers

List your key suppliers, including:

• Names, addresses, websites
• Amount of inventory furnished
• Their credit and delivery policies
• History and reliability
• Do you expect any supply shortages or short-term delivery problems? If so, how will you handle them?
• Do you have more than one supplier for critical items (as a backup)?
• Do you expect the cost of supplies to hold steady or fluctuate? If the latter, how will you deal with changing costs?
• What are your suppliers' payment terms?

3.   Credit policies

If you plan to sell to customers on credit, explain:

• Whether this is typical in your industry (do customers expect it)?
• What your credit policies will be. How much credit will you extend? What are the criteria for extending credit?
• How will you check new customers' creditworthiness?
• What credit terms will you offer?
• Detail how much it will cost you to offer credit, and show that you've built these costs into your pricing structure.

How will you handle slow-paying customers? Explain your policies, such as when you will follow up on late payments, and when you will get an attorney or collections agency involved.